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September 20, 2016 at 01:23 PM
When it comes to working with robo-advisors and other forms of automation, it’s time for financial advisors to act.
The first survey led by consultancy firm PwC found that 60% of asset and wealth managers worldwide fear losing part of their business to fintech companies. Yet only 45% have put fintech at the center of a digital strategy.
In comparison, 90% of banks surveyed have or will soon have a fintech approach in place, generally emphasizing mobile applications.
“There are a lot of issues here,” said Michael Spellacy, head of global wealth management for PwC, in an interview with ThinkAdvisor. “At the heart of it is the issue of what the future of advice is, along with the role of trust and the balance between human capital/advisors and robo-advisors/technology.”
And while it’s not surprising that wealth managers have a contradictory approach to the challenge—fearing, but not acting in response to, digitization—they need to recognize how important it is to embrace technology for the sake of their clients and, by extension, their practices, Spellacy pointed out.
“Wealth managers are stewards of very sacred information for clients—namely their financial and long-term goals,” he said, including legacy plans and retirement. “Today, you have to be able to engage clients with technology and have them experience [wealth-related] technology, as they are doing so in all aspects of their lives.”
As real-world advisors fail to move forward quickly and aggressively, robo-advisors are quickly picking up the slack.
